SEC's Refreshing Approach: Ethereum ETFs Won't Face Bitcoin's Approval Woes

Following a postponement in rendering a decision on Fidelity's Ethereum Exchange-Traded Fund (ETF) application, Commissioner Hester Peirce of the U.S. Securities and Exchange Commission (SEC) has indicated that the approval process for an Ethereum ETF will diverge from the path witnessed in the case of Bitcoin ETFs.

Peirce, also known as "crypto mom" in the cryptocurrency community, has enthusiastically acknowledged the newfound investment opportunities unlocked with the approval of Bitcoin ETFs.

Her optimism extends to the anticipation of a more streamlined approval process for forthcoming cryptocurrency ETFs.

About the upcoming Ethereum ETF applications currently under consideration by the SEC with a ruling scheduled for May, Peirce conveyed her perspective on the agency's approval process, underlining that the agency's approach to approvals will deviate from the past, indicating a shift in regulatory strategy.

"That's not how we're going to do our approvals," Peirce said in a recent interview.

"The agency, having heard from a court that the approach we were taking was ... not showing the kind of consistency that a regulator needs to show, I think that kind of a lesson will certainly stick with us," she added.

Peirce also expressed a strong sentiment, stating, "We shouldn't need a court to tell us that our approach is 'arbitrary and capricious' in order for us to get it right."

Moreover, she highlighted the extensive efforts required to prepare an exchange-traded product for the market, citing the example of Bitcoin exchange-traded products. She emphasized that the process is time-consuming and often challenging, with the specific details varying for each product based on its unique characteristics and circumstances.

"As we saw, I think even with the Bitcoin exchange-traded products, there's a lot of work that goes into getting an exchange-traded product ready for market," she said, adding, "These things can take a long time and can be difficult and really do depend on the facts and circumstances of each product."

The commissioner also emphasized the significance of diversity in perspectives within the SEC when it comes to rulemaking, particularly in the context of exchange-traded products.

She noted that this diversity of viewpoints was evident in the discussions surrounding such products. Peirce stressed the importance of including the perspective that the United States is a nation founded on the principle of individual choice, underscoring the need to uphold the ability of individuals to make decisions for themselves.

"The whole point of having a commission is to have different points of view reflected in rulemaking and I think you saw that play out with the exchange-traded products," she said, adding, "I think one important viewpoint to have reflected is this is a country based on the ability of people to make choices for themselves."

Following the successful launch of Bitcoin (BTC) Spot ETFs, the focus within the market and among analysts has shifted toward the potential inclusion of various digital assets in ETFs.

"Analysts predict, with over a 70% likelihood, the approval of Ethereum (ETH) Spot ETFs this year," Matteo Greco, Research Analyst at the publicly listed digital asset and fintech investment business Fineqia International, told International Business Times.

"This expectation is reinforced by analyzing ETH's price action. Immediately after the approval of BTC Spot ETFs, capital shifted from BTC to ETH. ETH appreciated by 17% against BTC in the approval week and 11% in dollar terms, indicating that market participants are banking on the approval of ETH Spot ETFs following the green light for BTC Spot ETFs and are adjusting their positions accordingly," the research analyst explained.

At 3:13 a.m. Eastern Time on Wednesday, Ethereum found itself in the negative territory, trading at a value of $2,232.55.

Over the past 24 hours, the cryptocurrency registered a decline of 3.18% in its valuation, indicating a period of downward price movement. Furthermore, when examining the broader context of the last seven days, Ethereum experienced a notable decrease of 12.28% in value.

Ethereum's current circulating supply is recorded at 120.18 million ETH, highlighting its significance within the cryptocurrency ecosystem. Additionally, its market capitalization is reported at $268.37 billion, according to data from CoinMarketCap.